Should Colleges Charge Different Tuition for Different Majors?

Reacting to to a sharp drop in state subsidies, colleges have opted for selective tuition hikes per undergraduate majors instead of equitable price increases. Does that influence how incoming students select their major? At least one analyst says that does, indeed, appear to be the case.

“In the face of declining state support, many universities have introduced differential pricing by undergraduate program as an alternative to across-the-board tuition increases,” says Kevin M. Stange in a recent white paper for the National Bureau of Economic Research. “This practice aligns price more closely with instructional costs and students’ ability to pay post-graduation.”

The paper finds that exploiting the staggered implementation of that approach in schools significantly changes the way students decide on a major.

“There is some evidence that student groups already underrepresented in certain fields are particularly affected by the new pricing policies,” the paper abstract continues.

What’s slightly unsettling is that by manipulating the pricing that way, the higher ed powers-that-be could influence the direction of the future workforce by compelling incoming freshmen to choose a major based more on economic necessity than personal interest.

“Price does appear to be a policy lever through which state governments can alter the field composition of the workforce they are training with the public higher education system,” Stange writes.